Wall Street Battles Silicon Valley for Tech Geeks
online.wsj.com
online.wsj.com
I can't speak for the whole industry as I've only worked at one firm, but my experience has been generally positive:
1. The work environment is similar to the software companies I interned with. Nobody wears a suit, the hierarchy is relatively flat, free food/soda/etc.
2. The problems are really interesting. HFT is a competitive game and good (read: fast and reliable) technology is just as important as smart algorithms.
The only downside? It's difficult to leave. I've had coworkers that have been around a while say that people generally don't leave the industry voluntarily.
Why? Money. I'm not trying to be a braggart but I can say with a high degree of certainty that I will never make as much as a developer at a normal software shop as I do now, with the exception of launching or getting in at the very early stages of a successful startup.
Believe me, I get the whole "money isn't everything", "adding real social value is more rewarding" mindset, I do. The reality is though that it isn't easy to halve your salary based on a philosophical argument, however persuasive, especially when you're still working on cool problems.
I can assure it will be nothing compared to what you are able to accomplish by starting your own company and building something you care about. In finance, you will be fighting against transparency for the sake of maintaining profits when you could be doing something way more important... And yes the problem solving is fun at first, but then you realize that you could be problem solving on something that matters to you. A few thousand dollars more doesn't matter, and if you figure in the cost of living in NYC you're probably making less.
That is my advice, take it or leave, but please, think about what you're doing.
"In finance, you will be fighting against transparency for the sake of maintaining profits" - not sure what you mean by this, if you could please clarify
Even then, waiting 15 years to make a million won't have the same affect on everyone. Have you read Tony Hsieh's book after he sold LinkExchange: he could either sit around for a year and collect his ~40 million just by showing up and not doing anything, or he could leave early, and take less. He left early and took the cut in pay. I'm sure he made the right choice.
Banks don't make a lot of money from equities, they make a lot of money from over the counter (OTC) markets. These don't trade on an exchange, they are traded via phone calls and bloomberg emails. Banks try to keep pricing information as close to the chest as they can so that they can keep a wide bid ask spread (meaning they buy low, and sell for higher, and not because of appreciation or financial performance). Banks make money by offering 2 way markets (like a book keeper would) so the less transparent they are with their pricing, they more likely they are to be able to increase the bid ask margin. They don't have to disclose prices, and the traders can mark the bonds at almost whatever price they see fit, even if the price they have is super stale. Not only that, no one really knows what some of these complicated securities are really worth. As someone who comes from a science background, I was shocked to learn that "research reports" are more like marketing/advertising and they are not allowed to publish a negative outlook.
In my opinion, it's a messed up system and I don't want younger hackers thinking its a cool thing to do.
This is hardly that simple. Lower cost of living means lower wages. That will be a wash with cost-of-living type products and services but not with, for lack of a better word, "international priced" items [1].
I don't understand why so many people in the self proclaimed capitalist hub of the world believe things like living in a lower cost of living area means you have more money.
[1] A closer word might be "luxury" items but it's hard to call something a luxury item that people of literally all classes have (e.g. an iPhone).
That is a false assumption.
http://swz.salary.com/CostOfLivingWizard/LayoutScripts/Coll_...
Click the first link.
This is a question that shouldn't be uncommon, and should be easy to answer. If people at these financial firms can't easily answer it (and don't say "we increase market liquidity by 1e-30%!"), it's no wonder new hires with lots of prospects would avoid them. Why not work at, say, Facebook, where you're taking part in changing the way people interact, and every single person your age is using your product every day.
If the most interesting thing you do in a day is increase the wealth of others for a tiny tiny fraction of it, that's a huge opportunity cost. You could be be spending 40-60 hours a week doing something you find much more rewarding, and still have high enough a wage to meet all your financial goals.
90% of web startups are "finding new ways for people to waste (their employer's) time so we can show them banner ads". Social good? Just sayin'.
The topic says it all though. It's true, Wall Street is on a hiring frenzy right now and they've started to realize how important good talent is.
It means they are going to have to start offering more to get the talent that typically dives off into silicon valley. NYC suits are also a hard sell to the t-shirt style of the west coast and that in itself may be a difficult obstacle.
I'd never work for a financial firm again. It's just too hard to get up in the morning so I can go into work and make columns of numbers a little bit different from yesterday. Boring as hell.
Medicine, likewise, pays well for a good reason: they need to get some of the smartest people in the world and pay them to do repetitive and mostly-kinda-yeechy stuff.
Academia is where you get some of the smartest people in the world and let them do stuff they actually want to do. This is why it's the only smart-people profession that doesn't pay very well.